Page 59 - bne monthly magazine October 2022

bne October 2022 Eastern Europe I 59
of a gas shortage caused by the Russian invasion. Although Naftogaz hasn’t managed to hit the 19bn cubic metre target set by the government, its current projection is 14.5 bcm by mid-October, enough to survive a mild winter.
Estimates vary on how much damage Russia has caused Ukraine and
how much will be needed for the reconstruction process. The World Bank recently announced it is conducting
an assessment and estimates that the war has cost Ukraine $350bn. At the Lugano conference, Ukrainian Prime Minister Denys Shmyhal said Kyiv
is looking for $750bn over a 10-year period. Bogov believes it is too soon to make an accurate estimation but he is sure international partners will support Ukraine’s reconstruction process.
Indeed, there are many new opportunities for Ukraine post-war. In particular, Bogov notes the possibility of rebuilding destroyed cities using
a green model and implementing climate-friendly infrastructure which could be one of the most efficient methods of reconstruction. Although Ukraine’s central and local authorities are preoccupied at the moment, Bogov sees potential interest after the war not only from Ukrainians but also from international partners to support such efforts, particularly as Ukraine now has EU candidate status.
Looking at the future of Ukraine’s key industries, Bogov is optimistic that
the agricultural industry will recover and continue to be a key pillar of the economy. He is not as certain about the devastated steel industry, which took a massive hit after the siege of Mariupol, home to Azovstal, the country’s most important steel plant. It is estimated that steel production dropped by 60% in July. Huge reconstruction projects will be needed to return the metallurgy sector to its former level of success.
On the other hand, the IT industry continues to thrive, mostly due to
the fact workers are able to operate remotely. Bogov sees that IT will become more prominent and become one of the “main pillars in the reconstruction process”. The Ukrainian government has invested significant effort into digitalsing the economy and introducing digital public services. With a highly qualified, well-educated tech-savvy nation, IT is likely to thrive after the war and help attract crucial investments.
However, Bogov also expressed con- cerns about corruption, which plagued Ukraine before the war and continues to do so. Over the summer, €8bn in
EU funding was stalled allegedly due to concerns about corruption and accountability. Ukrainian President Volodymyr Zelenskiy is showing that
he is taking the issue seriously and has appointed a new head of the Special Anti-Corruption Prosecutor's Office after a two-year gap. Nevertheless, apprehensions still prevail, particularly as prodigious sums of money will enter Ukraine post-war.
“No doubt corruption was one of the central issues before the war. It will be again one of the priorities in the reconstruction stage after the war,” Bogov said. “Certainly we closely looked at this before the war, and we will closely look after the war in the reconstruction period.”
He states that Ukraine needs to acquire the funds quickly and easily, but that this should not come at the cost of transparency. In fact, Bogov sees the reconstruction process as
an opportunity to implement a new way of working based on “competitive procedures and fully transparent procurement practices”.
“We think some basic principles of transparency and some sustainability analysis should be in place even during the war for the urgent reconstruction needs, but the full focus will be on this after the war in the reconstruction phase,” he said. “This would be a good opportunity to turn the page and make a significant improvement.”
EU energy ministers clash over Russian gas
price cap proposal
bne IntelliNews
EU member states have clashed over the European Commission’s proposal to place a price cap
on Russian gas supplies, casting
doubt on whether the measure will
be implemented.
The bloc’s 27 energy ministers met on September 9 to discuss a package of EC proposals aimed at depriving
Moscow of revenues to fund its war in Ukraine, and ease soaring energy costs for EU households and businesses. The ministers backed a number of the proposals, including a windfall tax
on generators of non-gas power and oil and gas, a bloc-wide reduction in power consumption and the provision of “emergency liquidity instruments” to support energy firms coping
with soaring energy purchase costs, according to Politico.
“Today, we managed to agree on
a common direction for temporary emergency measures and give a clear task to the commission to come forward with a robust and tangible proposal in a matter of days,” Czech Transport and Industry Minister Jozef
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